Revenue Errors Overshadow Remaining Term of Indiana's Governor

Governor Mitch Daniels has built a national image as a fiscal manager with an eye for detail, but two massive accounting errors that have tilted Indiana's books by more than half-a-billion dollars threaten to tarnish that reputation as the Republican governor prepares to leave office.

Budget Director Adam Horst says the state has mistakenly withheld more than $2 million owed to counties since January of last year. The error caused Indiana’s tax commissioner to offer his resignation and two of his deputies to end their employment with the state. The programming error means a windfall for cash-strapped local governments in Indiana, which collectively were shorted $206 million in income tax payments over the past 16 months.

This latest error follows $320 million in corporate tax payments that were never transferred into the state’s checking main account. The governor is currently on a trip overseas and his spokeswoman said he was not available for comment. Daniels has ordered an outside audit of the state Revenue Department.